Summary of loss application rules
Disclaimer
We do not guarantee the accuracy of this copy of the CRA website.
Scraped Page Content
Summary of loss application rules
| Type of loss | Application rules | Limit to annual deduction |
|---|---|---|
| Allowable business investment loss | Any unapplied portion of an ABIL becomes a non-capital loss that can be carried back 3 years and forward 10 years. The unapplied portion of the non-capital loss will become a net capital loss that can be used to reduce taxable capital gains in the eleventh year or any year after.Footnote 1 |
No limit Limited to taxable capital gains in the year. |
| Net capital loss | Carry back 3 years Carry forward indefinitely |
Limited to taxable capital gains in the year.Footnote 2 |
| Farm lossFootnote 3 | Carry back 3 years For a loss incurred after 2005, carry forward 20 years. For a loss incurred before 2006, carry forward 10 years. |
No limit |
| Listed personal property (LPP) loss | Carry back 3 years Carry forward 7 years |
Limited to net gains from LPP in the year. |
| Personal-use property loss | No loss allowed.Footnote 4 | Not applicable |
| Restricted farm loss | Carry back 3 years For a loss incurred after 2005, carry forward 20 years. For a loss incurred before 2006, carry forward 10 years. You can use part of any unapplied loss to reduce your capital gains from the sale of the farmland that was used in a farming business. |
Limited to net farming income in the year. Cannot be more than the property taxes and the interest on money you borrowed to buy the farmland that you included in the calculation of the restricted farm losses for each year. You cannot use it to create or increase a capital loss. |
| Superficial loss | No loss allowed You can usually add the amount of the loss to the adjusted cost base of the substituted property. |
Not applicable |
- Footnote 1
-
Any unapplied portion of an ABIL incurred in 2003 or prior years became a non-capital loss that could be carried back 3 years and forward 7 years. The unapplied portion of the non-capital loss has become a net capital loss that can be used to reduce taxable capital gains in the eighth year or any year after.
- Footnote 2
-
For net capital losses incurred before May 23, 1985, you may deduct an additional amount (up to $2,000) from other income. For more information, see How do you apply your net capital losses of other years to 2023?.
- Footnote 3
-
For the purposes of this chart, farm losses include losses from farming and fishing businesses. For more information, see Guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income, RC4060, Farming Income and the AgriStability and AgriInvest Programs Guide, or RC4408, Farming Income and the AgriStability and AgriInvest Programs Harmonized Guide.
- Footnote 4
-
For exceptions to this rule, see Personal-use property.
Page details
- Date modified:
- 2024-01-23